(Fortune Small Business) -- Police surveillance cameras can make civil libertarians queasy. But what if cops could listen for dangerous crime instead of watching?

Enter ShotSpotter, a Mountain View, Calif., company that has installed microphones on telephone poles in 45 cities and counties across the U.S. with few complaints from local citizens.

ShotSpotter monitors only one thing: gunshots. Its microphones can detect a gunshot from a mile or more away. The system determines the exact location of each shot using triangulation and wirelessly transmits a recording of the sound to police dispatchers. Today ShotSpotter monitors about 125 square miles with 900,000 inhabitants and charges $25,000 per square mile of coverage. The company is expanding, with 50 employees and counting.

The system was installed in San Francisco late last year as part of a crime-fighting initiative. Since the beginning of the year, the city's homicide rate has dropped 50%.

According to the San Francisco Police Department, the microphones have already had a deterrent effect. "There's an understanding within the criminal element of the technology, and I think that's causing incidents to decrease," says Lt. Mikail Ali, who oversees monitoring of the two-square-mile area covered.

CEO James Beldock, 34, who took over the company from scientist founder Robert Showen in 2004, was struggling with anemic growth until he acquired a small wireless company in 2005. That let ShotSpotter lose the cumbersome telephone wiring required by earlier versions of the technology.

ShotSpotter's clients include the U.S. Army, which has been testing the system in Iraq. As a result, the Commerce Department classified the microphones as military munitions, which meant that they couldn't be exported. But Beldock fought back, spending roughly $500,000 on lawyers and consultants. "Night-vision goggles went through the same thing 15 years ago," he shrugs.

It paid off: ShotSpotter won the right to pitch its product to police chiefs around the world. Its first target: Brazil, another country with a history of major gun violence.

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